May 11 (Bloomberg) -- Indian stocks climbed to the highest
level in more than two years in a special trading session in
Mumbai today.

The S&P BSE Sensex gained 0.2 percent to 20,122.32 at the
close in Mumbai, the highest level since Jan. 6, 2011. Volumes
were 21 percent below the 30-day average. Drugmaker Dr. Reddy’s
Laboratories Ltd. rallied to a record. Sterlite Industries
(India) Ltd., the nation’s top copper producer, advanced for the
first time in three days.

BSE Ltd., Asia’s oldest bourse, held the 90-minute session
to test its disaster management and recovery measures. The
National Stock Exchange of India Ltd., the nation’s biggest, and
MCX Stock Exchange Ltd. were also open.

Foreigners have bought a net $12.5 billion of domestic
shares this year, a record for the period, data from the market
regulator show. Factory output in March expanded at the fastest
pace in five months after the central bank cut borrowing costs
three times this year to help revive an economy that expanded at
the weakest pace in a decade last year, data showed yesterday.

“The ongoing rally has been boosted by foreign inflows and
easy global liquidity conditions,” Kishor Ostwal, managing
director of CNI Research (India) Ltd., said by phone today.
“The mood continues to be upbeat. A revival in industrial
production and rate cuts by the RBI is supporting the markets.
Plus, the earnings season has been better-than-expected.”

India’s industrial production climbed 2.5 percent from a
year ago after a revised 0.5 percent gain in February, official
data showed yesterday. The median of 26 estimates in a Bloomberg
survey was for a 2.4 percent gain. The central bank forecasts
economic growth will accelerate to 5.7 percent in the fiscal
year through March 2014, compared with the baseline projection
of 5.5 percent for the previous 12 months.

Earnings Scorecard

Profits at just two of the 14 Sensex companies that have
reported March-quarter earnings have trailed estimates, data
compiled by Bloomberg show. That compares with about 43 percent
that missed forecasts in the three months ended Dec. 31, and 40
percent in the previous two quarters.

The Sensex rallied 10.4 percent from a seven-month low from
April 9 as foreign funds extended purchases amid monetary easing
by central banks. The gauge is valued at 13.91 times forecast
12-month profits, the highest reading since Oct. 10, compared
with the MSCI Emerging Markets Index’s 10.6 times.

Today’s advance on the Sensex extended the weekly gain to
2.8 percent, the longest stretch since the five-week rally that
ended on Oct. 5. The 50-stock CNX Nifty Index increased 0.2
percent to close at 6,107.25, its highest level since Jan. 4,
2011. Volume on the Nifty was 92 percent below the 30-day
average. India VIX, which gauges the cost of protection against
losses in the Nifty, fell 0.1 percent to 16.84.